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Deferring Old Age Pension
Over the last year or so I have seen about 14 of these cases the highest amount given so far is £84,000 to an 86 year old.
As a benefit worker I am off course delighted for them, as a tax payer I am fuming that this is allowed to happen when they are trying to cut benefits and save public money.
Had one today aged 76 who is about to get £35,000 for doing without nothing, the £35,000 in capital is then fully disregarded forever.
So why am I so unhappy!
The elderly chap today retired 11 years ago and was on Income Support paid at the full amount, then onto Minimum Income Guarantee again at the full amount then all change again and onto Pension Credit Guarantee again paid at the full amount.
Last year a visit from a Pension Service person to his house to say that due to a recent change he now had to claim his Old Age Pension at £121 weekly, he would still get some Pension Credit and an extra amount from Savings Credit as well, all well and good.
Today he had the offer letter saying as he had deferred his Old Age Pension for the last 11 years he was due either an extra amount in his Old Age Pension at £57 weekly or the lump sum at £35,000, a no brainer really.
I have raised this with my local MP last year but sadly he could not follow why I was so unhappy, he did write to the Social Security Minister or what ever they were last year but again the reply they sent simply said anyone who decided not to claim their RP gets extra, yes if they have done without they would have been right but so far not a single persn getting these lottery type lump sums have done without a single penny during the period the RP was not being claimed.
Hi Tony
The purpose of deferring is that you have done without something during the period and not claimed any other benefits as a substitute for not taking your Pension.
Both these examples had Income Support, MIG & Pension Credit Guarantee so had the full benefit of these and all the passports that went with them during the time the RP was not claimed, so the Government saved not one penny.
The Pension Service seem to have paid the full RP’s due for the full period with no offset of the IS, MIG or Pension Credit already paid, thats the part that annoys me.
Agree 100% Tony
Have a good weekend
We were told that there is a known problem due to systems not interacting when SPC was introduced, and a policy of not recovering under s74 which would otherwise seem to apply. Our client has just had a windfall of £29,000 and is chuffed to bitsbut it hardly seems right really - it could have been offset against the overpayment.
I would not worry about recovery later as the previous ones i have dealt with who had very large lump sums are now well over a year ago.
Most of it is in fact arrears for a past period, as the right to a lump sum is only from April 2005. I was expecting that S 74 SSAA would apply to the earlier period. And in any event the overpayment can also be considered to be due to notional income from the unclaimed pension.
No more lump sums from April